AUSTIN – Cloud distribution Pax8 has announced that it has entered into a strategic partnership with data protection vendor Datto, the market leader in the managed services space. The deal is a global one and is comprehensive, covering the full suite of Datto’s business continuity solutions. It was announced at the CompTIA ChannelCon event here, where both companies were in attendance.
Datto has not used distribution at all before in North America, so this deal is a significant change in their go-to-market strategy. For Pax8, the deal is even more strategic. It is the most significant agreement in the company’s young history, and provides them with both significant validation for the market, as well as significant prospects for new revenues.
“We haven’t done traditional distribution before this,” said Rob Rae, Datto’s vice president of business development. “Pax8 is into cutting-edge SaaS applications, which makes them attractive to us. It will give the channel another opportunity to be able to access our product.”
Datto augmenting its traditional go-to-market model with distribution is a big deal. But for Pax8, signing on with a vendor of the strategic importance of Datto is a humungous deal.
“It is earthshaking for us from the standpoint that our enthusiasm couldn’t be higher for us,” said Ryan Walsh, Pax8’s senior vice president of partner solutions. “Pax8 needs to continue to grow our line card with fantastic brands, so becoming strategic partners with Datto is a perfect selection for us. I can’t say enough about how excited we are. And we can help Datto continue their momentum, increase their scale and increase their reach.”
Walsh said that the deal will increase Pax8’s credibility and market profile, although he also pointed out that Pax8’s growing profile in the market compared to several years back was critical in drawing Datto’s interest.
“We first approached Datto three years ago, having seen them at shows, and we wanted to know if they would be interested in a distribution relationship.” Walsh said. “They were not interested at that time. We were new. Datto was also doing just fine without distribution, and what they wanted from a Tier Two distribution partner was unclear.”
Pax8’s own momentum has built up significantly from that point, Walsh said.
“Whenever you create something new from the ground up, it will take some time,” he said. “Over the last 18 months, a lot more channel people now say they have heard of us compared to before. We’ve also won awards, like Best Places to Work in IT. We think our increased visibility was a reason that Datto came back and said we should talk.”
A significant change on the Datto side since the initial Pax8 approach was Datto’s growth from simply selling backup to an entire continuity suite. Walsh thinks that made Datto more receptive to distribution.
“With them having broadened their line card, it made more sense for them to have someone to represent the full line card,” he said. “They also understood that we bring partners in from different doors, and can bring over 50 new sales reps to them. They came back to us at the right time, with us looking to expand options with our line card, and looking for strong brands.”
To date, most of Pax8’s emphasis has been in North America. While the deal is a global one, Walsh said that won’t pose any problems for them
“We have been taking a page from the MXlogic playbook,” he indicated, referring to the company sold to McAfee whose executive team is heavily represented among Pax8’s founding executives. “That was to build out the base in North America, but then broaden out after building out that core. We have global distribution rights for most of the products that we carry today. If we need to expand staff for support and onboarding, we will cross that line if and when we need to.”
Tipping their toe into the waters of distribution with Datto might lead to broader changes in Datto’s go-to-market strategy.
“Could this lead to other distribution deals for us?” Rae asked rhetorically. “Perhaps.”